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Cash App closes the week on the hook for $255 million in several settlements around its consumer protection.
Block, the company that owns Cash App, agreed on Wednesday pay $80 million to 48 states which fined the company for violating laws meant to keep illicit activity off the platform.
“State regulators found that Block was not in compliance with certain requirements, creating the potential that its services could be used to support money laundering, terrorist financing, or other illegal activities,” says a press release from the Conference of State Bank Supervisors.
Separately, the Federal Office of Consumer Financial Protection arrived at a settlement with Block on Thursday, in which the company agreed to pay $120 million to Cash App customers and another $55 million to the CFPB. According to the bureau, Cash App’s weak security measures put consumers at risk and made it difficult for users to get help after experiencing fraud on the platform. Cash App is also accused of misleading consumers into thinking that their bank, not Cash App, was responsible for handling disputes and that Cash App did not offer “meaningful and effective” customer service, which “left the network vulnerable to criminals who defraud users.”
How to regulate peer-to-peer money transfer apps like Cash App is an ongoing struggle. This week, NetChoice and TechNet charged with defiance the CFPB’s management of such platforms as banks, calling it “an illegal power grab.” Google filed a similar suit in December.
